Not spending on AI yet? Don’t worry, you probably will

Worldwide spending on artificial intelligence (AI) systems will reach $35.8 billion (all figures USD) in 2019, according to IDC’s latest projections, a whopping 44 per cent increase over the amount spent in 2018. By 2022, that number is expected to more than double to $79.2 billion, equating to a 38 per cent compound annual growth rate (CAGR) over the 2018-2022 period.

Some of the more immediate applications of this technology – which we’re seeing already today – will be found in the retail industry where companies will spend nearly $6 billion on automated customer service agents and shopping advisor solutions. Banking won’t be far behind. IDC says the financial sector will spend $5.6 billion on automated threat intelligence and prevention systems and fraud analysis.

Marianne Daquila, research manager of customer insights and analysis at IDC, says it’s safe to assume advancements in AI will drive double-digit year-over-year spending for the next decade.

“Significant worldwide artificial intelligence systems spend can now be seen within every industry as AI initiatives continue to optimize operations, transform the customer experience, and create new products and services,” Daquila said in a press release.

Discrete manufacturing, healthcare providers, and process manufacturing round out the remaining industries in the top five for AI systems spending this year.

What exactly did IDC look at in its AI systems spending report?

  • 9 regions: The United States, Canada, PRC, Japan, Western Europe, Central and Eastern Europe, Middle East and Africa, Latin America, and Asia/Pacific
  • 19 industries: Banking, insurance, securities and investment services, discrete manufacturing, process manufacturing, construction, resource industries, retail, wholesale, professional services, personal and consumer services, transportation, healthcare provider, federal/central government, state/local government, education, telecommunications, media, and utilities
  • 20+ use cases including: Automated customer service agents, automated threat intelligence and prevention systems, fraud analysis and investigation, expert shopping advisors and product recommendations, and others
  • 6 technology markets: Business Services, Cognitive Applications, Cognitive Platform, IT Services, Server, and Storage


The largest area of AI systems spending this year will be on AI applications and software platforms, at nearly $13.5 billion. IDC says AI applications will be the fastest growing category of all AI spending with a five-year CAGR of 47 per cent. And, of course, there’s the hardware supporting the infrastructure needed to support those AI systems. This year hardware spending will be dominated by servers at $12.7 billion.

Most channel partners likely understand the opportunities in front of them when it comes to integration, consulting, and managed services, but it’s worth noting again. IDC says by 2022, AI-related services spending will nearly equal hardware spending. David Schubmehl, research director of cognitive artificial intelligence systems for IDC, says organizations are fully aware of the potential efficiencies AI can deliver, which is why they are willing to spend so much despite the ongoing challenges they face when it comes to implementation.

“They are finding that they can help to significantly improve the bottom line of their enterprises by reducing costs, improving revenue, and providing better, faster access to information thereby improving decision making,” Schubmehl said in the release.

This year, the U.S. will deliver nearly 66 per cent of all spending on AI systems, led by the retail and banking sectors. Japan will have the strongest spending growth over the five-year forecast, with a CAGR of 51.4 per cent.

IDC didn’t single out Canada, but based on Canada’s inability to deploy AI successfully – Gartner says Canada ranks last out of 10 countries when it comes to the deployment of AI – and the fact that small businesses dominate Canada, it’s safe to assume Canada’s spending on AI won’t compare to Japan and the U.S.

Would you recommend this article?


Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.

Jim Love, Chief Content Officer, IT World Canada

Featured Download

Alex Coop
Alex Coop
Former Editorial Director for IT World Canada and its sister publications.

Related Tech News

Featured Tech Jobs


CDN in your inbox

CDN delivers a critical analysis of the competitive landscape detailing both the challenges and opportunities facing solution providers. CDN's email newsletter details the most important news and commentary from the channel.